Amid multimillion-dollar publishing deals, the market for individual songwriters' copyrights has been steadily heating up.
While high-profile publishing deals such as Concord Music's $500 million acquisition of Imagem in June and Round Hill's $245 million purchase of Carlin America in September may be dominating headlines in 2017, sales of individual songwriter catalogs are quietly booming as well.
"It's a frenzy," says Manatt Phelps & Phillips attorney Gary Gilbert. "Publishers call me almost every day asking, 'What have you got for me?'"
Typically, a songwriter's catalog that contains hit records has sold for 10 times its net publishing share. Now, in a seller's market, songwriters are routinely seeing multiples of 10 to 12 times NPS and, in some cases, a multiple of up to 16 for their copyrights. And independent publishers have led the shopping spree. Primary Wave has been among the most aggressive, snapping up songwriter catalogs in recent months from Smokey Robinson, legendary Stax guitarist Steve Cropper, late classical pianist Glenn Gould, R&B songwriter/Tony Award nominee Brenda Russell and Canadian Music Hall of Famer Tom Cochrane.
"The environment of acquisition now is better than when we started in 2006, because the music we're buying is a much better income stream," says Primary Wave founder/CEO Larry Mestel. “We’re no longer in an environment where the music business is falling. It’s very stable right now.”
"At the moment there is a lot of money floating around and people realize that publishing is the mother lode," says Jeff Biederman of Manatt Phelps & Phillips. "There’s so much wealth in indie publishing. A lot of deep pockets."
Recently, fellow indie Kobalt purchased the catalog of George Benson, Downtown bought Wayne Kirkpatrick's copyrights, and Reservoir bought catalogs of soul artists Willie Mitchell, Leon Ware, Thomas McClary and Walter Orange. "The market for extraordinary song copyrights has always been strong, [but] the potential that exists in paid streaming is shining a brighter light on our sector," says Downtown CEO Justin Kalifowitz.
Most songwriters, however, are still waiting for the revenue from streaming to catch up to its promise, and that lag is helping drive catalog sales.
"It will be a while before a writer is paid his or her due on Spotify the way labels are, so, for some of these folks, they can pull the money out of a catalog and buy real estate or some other investment that will provide a better rate of return over the next 10 years," says Biederman.
That factored into Cochrane's thinking. "The curve will continue to go up for writers whose career arc may have been earlier," says the "Life Is a Highway" songwriter. "But it's a much slower rate than for contemporary artists like Drake or The Weeknd."
Plus, Cochrane, 64, says, “The reason you’re seeing this is a lot of us are getting older.” Biederman concurs, noting “a trend towards more mature songwriters who want the money now to enjoy it.”
More important, all of the aforementioned writers have catalogs that contain evergreen titles that are catnip for publishers as they look to exploit classic songs in film, TV, advertising, internet and video-game licensing. And many publishers are getting inventive with their treasure trove. "We made a deal with American Greetings to create a holiday for Smokey: Father/Daughter Day," says Mestel. "But you can get stuck if you overpay and don't have a strategy to market, brand and promote the music."
Heritage songwriters aren't the only ones taking advantage of the high prices. In April, Ryan Tedder sold rights to his non-OneRepublic songs to Downtown for a rumored $50 million (Kalifowitz wouldn't comment), and country superstar Dierks Bentley and ASCAP's 2013 Country Songwriter of the Year Josh Kear have sold portions of their catalogs within the last two years to Kobalt and Round Hill, respectively.
For such writers still in their peak earning years, they usually sell copyrights written during a specific three-to-five year period instead of their entire catalog. “If you do it right and break it up into a bunch of these chunks, you can constantly be talking to your client about ways to monetize,” Biederman says. “There’s always a stream of potential sales.”
The deals and prices come in all shapes and sizes, with publishers quoting ranges from $250,000 to $50 million. And there's no sign that demand is slowing. "I thought it was going to peak last year," says Gilbert. "But it didn't. It's an amazing time."